Unconditional cash transfer (UCT) programs aim to reduce poverty by providing welfare programs without any conditions upon the receivers' actions. This differentiates them from conditional cash transfers where the government (or a charity) only transfers the money to persons who meet certain criteria. Unconditional cash transfers have developed on the premise that giving cash to citizens allows them to have autonomy over their own lives.
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Types of unconditional cash transfers
Unconditional cash transfers could vary in a number of ways:
GiveDirectly
The largest organization exclusively devoted to cash transfers is GiveDirectly. GiveDirectly was founded by economics graduate students in Cambridge, Massachusetts, with two main inspirations: the growing evidence that cash transfers could work, and the growth of cheap and reliable money transfer technology. GiveDirectly's operations were initially limited to Kenya, where the m-Pesa money transfer system is well-established. In November 2013, the organization expanded to Uganda.
Charity evaluator GiveWell first noticed GiveDirectly in July 2011, named it as a standout charity in November 2011, and gave it top charity status starting November 2012. GiveDirectly has been a GiveWell top charity in the years 2012, 2013, 2014, and 2015. Largely as a result of GiveWell's recommendation, Good Ventures, the private foundation of Facebook co-founder Dustin Moskovitz and his wife Cari Tuna, that works closely with GiveWell, has donated well over $40 million to GiveDirectly (in grant sizes of $7 million, $5 million, $25 million, and $9.8 million).
An impact evaluation of GiveDirectly's cash transfer program was conducted in collaboration with GiveDirectly, with the working paper released in October 2013. The paper attracted commentary from World Bank economist David McKenzie. He praised the robustness of the study's design and the clear disclosure of the study lead's conflict of interest, but raised two concerns:
Chris Blattman, a prominent blogger and academic in the area of development economics, with a particular focus on randomized controlled trials, also blogged the study. He expressed two main reservations:
The Cash Learning Partnership
The Cash Learning Partnership is a partnership of over 150 organizations and over 5000 individuals in the humanitarian sector where they pool knowledge and expertise surrounding cash transfers and their effects. Their website includes a number of studies on unconditional cash transfers, with a particular focus on cash transfers made in the aftermath of natural disasters. Salient examples include:
Other programs
A blog post by Vishnu Prasad for the Institute for Financial Management and Research summarized existing research on unconditional cash transfers, citing studies around the following programs:
The use of unconditional cash transfers as a benchmark
Jeremy Shapiro, a GiveDirectly co-founder and the person who published GiveDirectly's impact evaluation, has argued for using cash transfers (and more specifically, unconditional cash transfers) as a benchmark against which other development interventions should be evaluated, due to the simplicity and scalability of cash transfers.
Others who have also endorsed the idea of using cash transfers as a benchmark, citing GiveDirectly, include Innovations for Poverty Action and GiveWell.
Media discussion of unconditional cash transfers
Since 2012, there have been a number of media pieces discussing cash transfers, generally in the context of reporting on GiveDirectly. This includes coverage in the New York Times, The Economist, the Freakonomics radio podcast, and Forbes.